While change is constant, the past few years have seen a dramatic increase in the breadth and depth of change that organizations are facing. The onset of the COVID-19 pandemic, among other factors, has accelerated a number of trends and created new ones, forcing many organizations to pivot to new business models and move up their digital transformation timelines. At the heart of all these changes sits the Chief Financial Officer (CFO), a role that has been evolving into something new for years and is no longer just a keeper of the corporate checkbook. Looking to 2022 and beyond, CFOs are going to play a key part in helping organizations evolve to meet new and existing needs.
The Changing Role of the CFO
The role of the CFO has shifted from purely accounting and compliance to something more proactive and collaborative. Whereas CFOs used to operate primarily in their own silo, they can no longer afford to operate separately. Instead, they must have a broader awareness of how the organization works as well as its short-term and long-term goals.
Today’s CFO needs to:
- Be able to communicate with different stakeholders/departments. A modern CFO needs to partner with others throughout the organization and be able to speak to them in a language they understand. Moreover, they need to have a basic grasp of how other departments operate, their goals, and which kinds of data they find actionable.
- Think globally. As the global landscape grows increasingly complex, with different business models, cultures, and compliance considerations, CFOs need to be able to navigate this complexity with confidence. While solutions like a cloud-based financial management solution can help standardize data and reduce overall complexity, having a strong global perspective is still key to developing a solid strategy.
- Be the keeper of data. According to Workday’s CFO Indicator Survey 2021, 49% of CFOs said that data management and analysis was one of their top two digital transformation priorities over the next one to three years. This is unsurprising, given that, as an organization moves along its digital transformation journey, the amount of available data increases dramatically. This only magnifies the need to properly manage said data. Finance departments need to own data management and ensure that the right data finds its way to the right people. Moreover, CFOs and others in the finance practice will need to help others make sense of the data and use it to tell a story.
Ultimately, the CFO is a key voice in shaping an organization’s strategy and plays a critical part in turning that strategy into a reality.
A Look at the Future of the CFO
There are a number of different priorities that CFOs will have to contend with over the course of the next few years. These include:
Paving the Way for AI, Machine Learning, and Robotic Process Automation (RPA)
Workday’s CFO Indicator Survey 2021 also showed that “33% of CFOs plan to prioritize investing in AI and machine learning.” Those CFOs that work at more digitally mature organizations are also more likely to prioritize AI and machine learning. Automation is also going to be a priority for CFOs, as it reduces the number of everyday tasks that a finance team needs to perform on a regular basis, freeing up their time and allowing them to focus on more high-level analysis. Organizations that are still early into their digital transformation journey will be looking to lay the foundation to use solutions such as machine learning and RPA, namely through solutions like a cloud-based ERP.
Driving Environmental, Social, and Governance (ESG) Efforts
According to the Global Sustainable Investment Alliance, ESG investment increased by 55% in 2020 and is estimated to reach over $50 trillion by 2025. Changing consumer expectations, the need to attract and retain top talent, and other factors have all fueled the need for organizations to invest in ESG initiatives. While ESG initiatives may be owned by various people throughout an organization or possibly by a dedicated team, the CFO and finance organization will play an important part in tracking and interpreting ESG results. Those organizations that are further along in their digital transformation journeys are well- equipped to track and analyze their performance in these areas.
Developing a Strategy for Mergers & Acquisitions
We have seen an explosive increase in the number of mergers and acquisitions (M&As) over the past couple of years – a trend that will most likely continue through 2022. For businesses that are making M&As a part of their growth strategy, it is imperative to have a well-defined process for bringing new organizations into the fold.
All of the priorities mentioned above require a solid digital foundation to truly execute successfully. If your organization still needs to create that foundation and is considering Workday as its cloud enterprise resource planning solution, then Collaborative Solutions can help. Learn more about our deployment services here.
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